The Role Of DSPs In Audience Extension

Audience extension represents one of the largest revenue growth opportunities for publishers of every stripe – from traditional pubs to digital natives and everything in between. Briefly
defined, audience extension is the practice of publishers selling ad campaigns targeted to their site visitors, but on ad inventory they do not own or operate.

Executing audience extension
involves two key tool sets: gathering audience data using DMP (data management platform) tools; and campaign execution using DSP (demand side platform) tools. Combining the capabilities of these tools
allows publishers to build an audience extension offering that is both differentiated from other publishers and complementary to their core offering.

Before we dive in, which vendors are
which? Ad technology vendors may offer one or both in their arsenal: pure-play DSP or DMP vendors offering only one side of the equation, or hybrid platforms that cover both. In many cases, a
pure-play in either space will white-label a vendor in the other. Be sure to ask which technology is native and which is licensed. Pure-plays, as a rule, tend to go deeper in their space than broader
platforms.

A lot of attention has been devoted to the DMP side of the equation, so let’s review DSP tools. If you’re not well versed in DSPs, don’t panic. There's a lot
of material online about comparing them and their capabilities. Forrester's Wave study, available here, is a little dated but still offers a solid overview of the space.

When looking at
DSPs and how they influence your audience extension program, there are a couple factors to consider. First, the channels that a DSP operates in, such as video, display, mobile, social or even email.
You can extend your audience into any of those channels, individually or in combination. Increasingly, multichannel execution is critical to marketers trying to reach a fragmenting consumer base.

Within each channel there are varying degrees of targeting options. These range from capabilities like content channel targeting to frequency capping to audience targeting to dayparting, among
dozens of other options. Some targeting is specific to a channel, such as in-application targeting for mobile, and others are generic, like dayparting. Here again, it’s important to understand
if DSP technology is native or licensed: Some DSPs develop display technology (for example) and license video technology from another vendor.

Pricing models are another important
consideration. You can access DSPs in a number of different ways, including CPM, CPC and CPA pricing models. Each comes with varying degrees of control, transparency and performance risk.
Another consideration is service model: Do you want to run a self-serve or managed service? Can you transition between service models? Are there hybrid options? Choose a platform that will grow with
your business.

Like DMPs, DSPs can also help with lookalike modeling to extend the reach of your audience. As a buying-focused technology, the most advanced DSPs will have algorithmic
capabilities for lookalike modeling that can even extend outside of the pool of first- and third-party cookie data.

A robust audience extension product may include other vendors, as well.
Examples include dynamic creative companies, contextual targeting, or a range of other vendors.

Finally, consider how the wide range of media execution options from your DSP combines with
your core assets – brand, audience, on-site ad sales – to form a coherent offering to your advertisers. Is your extension product blended with your on-site sales? An add-on? Or is it a
standalone, independent offering?

Intelligently tying all of these pieces together can lead you to an offering that is compelling for your advertisers, cost-effective to execute and a great
incremental revenue driver for your business.